Musk's Starlink market entry is a new test for ICT regulators
Opinion
By
Oscar Magu
| Sep 04, 2024
The entry of satellite internet service provider Starlink in Kenya’s telecommunications sector has generated significant debate regarding the state of competitiveness in the lucrative sector and the role of industry regulators in maintaining a level playing field.
Starlink, owned by US billionaire Elon Musk, first announced its kits were available in Kenya last year, and since then the service has recorded an aggressive deployment and brisk uptake.
According to the Communications Authority of Kenya (CA), satellite internet capacity in the country went up from 0.4GB per second in December last year to 48GB per second in March this year.
Starlink’s foray into Kenya carries several similarities to the entry of the country’s third mobile service provider Econet Wireless 16 years ago, and bears several lessons for the country’s ICT regulators.
In 2003, the CA, then Communications Commission of Kenya, issued Econet Wireless with a licence to launch and operate Kenya’s third nationwide GSM network - only for then ICT minister Raphael Tuju to overturn the decision.
This kicked off a five-year tussle where Econet Wireless fought courtroom battles and a Sh15 billion licence fee demand before the telco could launch its operations in Kenya.
By the time YU Mobile was rolling out in 2008, Safaricom had launched M-Pesa and floated an initial public offering which became the country’s most successful share sale yet.
While Econet wireless navigated the regulatory morass, Safaricom and Airtel registered subscribers by the millions and in 2014, just five years after launch, Econet folded operations and sold its assets to the two leading telcos.
Today, 15 years later, it is worth imagining how differently Kenya’s mobile money and telecommunications market would have evolved had Econet Wireless launched operations in 2003 as planned.
As the ICT regulator, one of the Communications Authority’s key duties is to establish a fair competitive market using its regulatory powers through licensing, type-approval and consumer protection standards.
However, the case of Econet Wireless in 2003, just like Starlink’s entry in Kenya today, demonstrated the failures of state regulators in a sector that is characterised by rapid innovation and growth.
This was also evident during the Worldcoin saga last year where thousands of Kenyans lined up in various locations to have their biometric data collected in exchange for a few hundreds of shillings.
WorldCoin, a blockchain-based project co-created by Sam Altman, co-founder and CEO of Open AI, sought to generate digital identities on a global scale that would then be used to distribute global wealth to vulnerable peoples through the WorldCoin cryptocurrency.
A parliamentary inquiry, however, found that Kenya’s Office of the Data Protection Commissioner (ODPC) did not carry out due diligence before registering Worldcoin operations in the country.
Parliament found that Worldcoin officials exploited the inadequate regulatory standards in the country to launch operations without obtaining required permits from the Ministry of ICT, Data Commissioner and Central Bank of Kenya, among others.
In a new twist, though, the cryptocurrency firm will be able to resume operations after police investigations against it for illegally collecting personal data were recently dropped.
As regulators, the CA and ODPC have significant power and authority in ensuring that new players in the ICT sector uphold the best market standards and pricing formulae that prime consumers’ interest.
Starlink’s entry into the Kenyan market presents an opportunity to Kenyan regulators in the ICT sector to firmly mark the boundaries and rules of play in an industry that is dynamic and presents immense opportunity for local and international players alike.
The writer is CEO of Maudhui House, a public affairs consultancy